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U.S. Treasury yields edged lower Monday morning, following the biggest weekly rate rise for the benchmark 10-year government note since late June.
What yields are doing
-
The 10-year Treasury note yield
TMUBMUSD10Y,
1.286%
traded at 1.273%, compared with 1.288% on Monday at 3 p.m. Eastern Time. On Friday, the 10-year saw its biggest one-week gain in yield since June 25. Yields for debt fall as prices rise. -
The 30-year Treasury rate
TMUBMUSD30Y,
1.939%
was at 1.925%, versus 1.933% to end last week. -
The 2-year Treasury note
TMUBMUSD02Y,
0.208%
was at 0.200%, compared with 0.208% on Friday.
What’s driving the market?
Yields were staging a modest pullback Monday morning after a monthly reading on Friday on employment from the Labor Department helped to drive bond rates higher. The data showed that the U.S. created 943,000 jobs in July, which was the biggest jobs gain in nearly a year and a sign that the economy’s rebound might not be impeded by the delta strain of the coronavirus that causes COVID-19.
Friday’s employment data will make a reading about job openings in the U.S., due at 10 a.m. Eastern Time, significant.
Investors later in the week will also be looking ahead to auctions of 3-year
TMUBMUSD03Y,
and 10-year notes, as well as the 30-year bond, that could provide insights on investor appetite for U.S. government debt.
Meanwhile, investors will also look out for comments from Atlanta Fed President Raphael Bostic, who is due to speak at 10:10 a.m. Eastern about building an inclusive economy during a virtual event hosted by the Greater Fort Lauderdale Alliance Foundation’s Property Partnership; while Richmond Fed President Tom Barkin is scheduled to speak at 11:30 a.m. at the Roanoke Regional Chamber.
What analysts are saying
“Treasury supply coming this week in 3yr, 10yr and 30yr maturities which should cheapen the yield curve a bit more over the coming days,” wrote Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities, in a Monday research note.
“That said, we do prefer buying dips looking for lower yields in August due to delta variant and the possibility of U.S. slower growth as a result,” the analyst wrote.
